How Small Business Owners Win in 2026

Money Rehab with Nicole Lapin

Small business owners face ongoing stress from inflation and energy costs but remain resilient. Gen Z entrepreneurs are driving innovation with bold, calculated risks and digital tools. U.S. Bank’s survey reveals shiftin

Key takeaways

• Gen Z prioritizes cultural relevance over steady revenue

Transcript preview

Speaker 1 (0:00) I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money. Remember you have. Business owners, side hustlers, W2 employees who are thinking about making the entrepreneurial leap, this one's for you. Because between macroeconomic factors and new AI tools, there are a lot of new opportunities for founders. Yet optimism in founders is down from last year. But you guys, we got this. Our partners at U.S. Bank put together an annual small business survey to understand the challenges facing businesses right now and ultimately help and build solutions. So to dig into what they learn this year, I'm talking to Shruti Patel, U.S. Bank's chief product officer for the business banking segment. We talk about small business growth strategy, what Gen Z entrepreneurs specifically should know about scaling, and the small payment method switch that, could make a big difference to your bottom line. Fruti Patel, welcome to money rehab. Well, thank you for having me, Nicole. I'm so excited. No, no, I'm so excited to talk to you because I have actually never talked to a chief product officer of a bank and I have so many suggestions and so many ideas. Well, I'm glad I have my not bad because I'll be making a lot of points. I think it's so, so cool. So thank you for being open to taking my suggestions. I have many of them as a business owner myself. I would love to see like a cash flow chart or something. I would love to see something go over to Texas so I don't touch it. Anyway, I have many, many ideas. But I want to dig into the survey that you guys put out because so much of what you're doing is data-driven. And we're all data nerds here. So what was the finding that you saw that businesses are really focused on now? So many insightful findings, I would say, you know, this is our fourth year. We do an annual survey of small businesses across the country. And it's not really just U.S. Bank customers. Our intent is to really get close to the sentiment small businesses are feeling at the time of, you know, the survey is taken. Small businesses are feeling immense stressors and macroenvironment pressures right now. This comes as no surprise to anyone. Given the steady inflation we have been in the last few years, consumer spending and sentiment is evolving. the recent energy crisis continues to add pressure to small business operations. And so I would say, you know, the number of businesses who reported their business as successful still remained high, but we did see both the way they are reporting growth and optimism softened year over year. But what is also good is the contrarium to all of that sentiment, which is almost all of the small businesses continue to remain super resilient. And, you know, it demonstrates the durability because they continue to invest in their businesses, whether it's hiring new staff, expanding their products and services. And so, you know, I would say entrepreneurship still very much remains the backbone of the economy while they're feeling the pressures, the optimism to invest in, you know, their businesses remains very high. I think you have to be optimistic to be an entrepreneur or crazy or both or I've had a traumatic childhood. I don't know. Like here I am living it day to day. You have to be an irrational optimist to be an entrepreneur. And what I saw really interesting in the survey was that it went from 93% to 83%. So while you said it was softening, like that's still pretty optimistic to me. Pretty optimistic. And, you know, I would say for a lot of these small businesses, it's not just business. It's very personal. The success of the business is what they're counting on, you know, to continue that livelihood. So I would say definitely a great finding for us. Yeah, it's completely personal. I started this business with my life savings. You know, US Bank helped us rebuild from the palisades fire. Every dollar that comes in and out of the business is so, so personal. And stress is so high. So what did the survey show about stress levels? I'm assuming those are not softening. The stress levels are not softening. But we've also seen some of those stress levels show up year over year. I think the small businesses have figured out a way to navigate under this immense pressure, whether that's inflation, rising cost. Last year, we observed tariff uncertainty. This year, tariff uncertainty was replaced by the energy crisis. And so I do think that one of the reasons why you're seeing the resilience is because they're figuring out new ways, whether that's adopting AI, you know, adopting new digital tools to drive innovation. But they're determined on running their operations more effectively, more efficiently, with less capital, with rising costs. And I think that's where a lot of the resilience is really coming from. Yeah, and I think it's so important to not just guess what the customer wants. Obviously, testing, testing, testing. It's, I mean, it took me many, many years, maybe more than a decade to figure out that I can't just go based on my gut as a business owner. I need to see what the customers want. I thought it was really interesting, though, that only 3% of business owners want to consider some sort of M&A activity or exiting their business in this environment. Is that because there's not as much M&A activity? I think we're seeing a lot of that cap-x at the top around the bigger companies. Or is it that there's just a bigger sample size? There's just more businesses popping up. I would say probably both. Yeah, I think, you know, we are going to see a great transition happen over the next 10 years. You know, last year we reported that almost half of the small business owners are age of 55 or more. And so as they think about succession planning, transitioning, the newer demographic, like the millennials and the Gen Z stand to inherit or acquire a lot of these businesses. And we're seeing the desire to do so. So I would say it's the sample size, but also I think, you know, the MNA, but a lot of them are thinking about succession planning and transition. And there's more to come in the next 10 years as the current population thinks about, you know, stepping down and passing it on to airs or other successors. So passing it on to Gen Z. And I know you guys focused specifically, if I could get in the head of all the Gen Zs, I think that that's a business in it of itself, also decoding their job. jargon too. That would be really helpful. But was there some finding specifically to Gen Z as they're looking to inherit or potentially acquire the businesses that are going to be trading? We found very interesting insights from the Gen Z. So you're absolutely right. We oversampled Gen Z small business owners in our survey. And the intent was exactly what you said. We want to get into their heads. How are they thinking about new innovative technologies, how they think about approaches to entrepreneurship. And I would say compared to the previous generations, whether that's the millennials or baby boomers, they have a very different approach to both entrepreneurship and how they think about business risk. They are willing to take very bold, calculated risk to pursue faster growth and acceleration. They are also putting less emphasis on steady predictable revenue and more on cultural relevance, social media visibility, and, you know, partnership-driven growth. And one of the biggest findings we thought is that they are willing to set aside some of the personal sacrifices. And what I mean by that is a lot of them are willing to delay starting their life, whether that's getting married or starting a family, because business feels so much personal to them in the current economy. And, you know, what was really surprising is that actually it's paying off. The Gen Zs who reported having taken very bold, calculate, risk-based decisions are also reporting faster growth. And they're seeing faster success in their businesses. And they're also more likely to use innovative technologies like AI and digital tools, which is a very promising sign given the journey and the excitement we are feeling about both not only digital tools, but also AI. Well, as an elder millennial myself, what I thought was really interesting that you said specifically was it bold and also calculated. So I've taken a lot of bold risks. Not all of them have been calculated. So what do you think that means? Is there more caution going into business? Is there more planning going into business? Or how is Gen Z looking at success differently than us elder millennials? I would say they put less weightage on the downside risk. So yes, they are taking very bold calculated risk decisions. But I think, as I mentioned, you know, the emphasis on steady predictable revenue is much less. and they're willing to accept the